Innovative solutions for creating healthy, efficient, eco-friendly homes

Solar Hot Water Pays Off

Energy costs are escalating more rapidly today than at any other time in history, and energy bills are squeezing budgets. The good news: Every hour of sunlight delivers enough energy to provide all the power consumed worldwide in a year.

There's never been a better time to invest in systems that will capture the sun's power and reduce dependence on fossil fuels. For the majority of homes in the United States, heating domestic hot water is the second largest use of energy, consuming an average of 16 percent -- and as much as 30 percent -- of every dollar spent on energy. Because of this daily assault on your finances, you'll get the greatest investment return on a solar system if you start with a domestic hot-water system.

How It Works

Photos Courtesy Cooper Heath Solar Settlement, Bielefeld, Germany

The operation of a solar water-heating system is simple: Sunlight strikes the south-facing surface of a flat-plate or heat-tube-style solar collector (see Types of Solar Collectors on page xx) that's typically angled to match your latitude. The controller's sensor detects the rising fluid temperature, which activates an electrical pump. On some systems, a photovoltaic (PV) panel on the roof generates direct current to power the pump.

The pump moves a heat-transfer fluid of glycol and water in a closed loop from the solar collector to a heat exchanger that's located either inside or outside a storage tank. The internal heat exchanger transfers heat energy (captured by the collector) and fluid to potable (drinking-quality) water in your storage tank. External heat exchangers have a second pump to move potable water from the storage tank through the heat exchanger, transferring the heat energy.

A thermostatic scald-guard mixing valve limits the temperature of potable water that leaves the tank and flows to the home's fixtures. The result is that you get to enjoy free liquid sunshine while reducing your dependence on fossil fuels.

This type of solar hot-water system is indirect, since the solar heat is transferred via a heat exchanger from the fluid to the potable water. Another type of system, called direct, uses a pump to circulate potable water from a storage tank through tubes in the solar collector, where the water is heated, and back to the tank.

Indirect systems are recommended for northern climates, due to the need to drain the roof panels (automatically or manually) when nighttime temperatures fall below 42 degrees F to prevent freeze damage to the collector, as well as during off-peak load demands. These are commonly called drainback systems. Direct systems are more commonly used in southern regions where freezing temperatures are rare.

Closed-loop systems are either active, in which a pump moves the fluid, or passive, which do not have any moving parts. Passive systems rely on gravity thermal migration. In these systems, a storage tank is located above the solar collector. As the water is heated, it rises into the tank, while colder water sinks into the collector.

Choosing a System

Determining which solar hot-water system is the best option for price, performance and energy savings can be a daunting task. One source that can help is the Solar Rating & Certification Corp., an independent certifier of solar systems.

The SRCC tests solar systems for their performance and lists the results in its OG-300 certification report, which you can access at The SRCC serves a great cause by helping [homeowners] avoid the fly-by-the-seat-of-your-pants systems [like those] that were installed in 70s and early 80s, says Peter Biondo, a solar consultant and owner of USA Solar in Sedona, Ariz.

The best system that requires the least maintenance will be a closed-loop one with a solar PV-powered pump to avoid any issues of overheating [the fluid or water] should the electric company's grid fail, explains Mike Tierney of Aspen Solar Systems, located in Aspen, Colo. A closed-loop solar water-heating system should easily provide anywhere from 30 to 90 percent of a home's hot-water needs.

The installation of solar systems requires proper planning, roof penetrations, electrical and plumbing work, and the installation of heavy panels on rooftops. Permits and inspections also will be required, so professional installation is recommended. Contractors should have insurance coverage to protect themselves and you.

Sizing depends on your location (you'll need to have direct sunlight at your site from approximately 9 a.m. to 3 p.m.), the number of people who will be using hot water, their bathing habits, panel size and storage capacity. To get an idea of the system size appropriate for your home, as well as the cost and potential savings, you can use the My Solar Estimator tool available on the Find Solar website ( The site also can help you locate manufacturers, dealers and installers in your area.

Solar Costs

If you're interested in a solar hot-water system but the cost is a stumbling block, consider this: If you've owned your home for more than five years, you may already have paid for a solar hot-water system. But instead of keeping your hard-earned money, you've given it to a utility company. Now that those energy bills you've been paying have risen by 20 to 50 percent, your current energy costs probably have rising enough to make a solar system economically viable.

Price has not been an issue with our customers, says Damon Vilppu, of Golden, Colo.-based Industrial Solar Technology Corp., who notes that the average installed price of a solar hot-water system is $6,000 to $9,000. By the time our customers call us, they've already educated themselves about the long-term savings and literally can't wait for their system to be installed. With the new federal tax credits and increasing fossil-fuel energy costs, we've noticed a large increase in the number of phone calls.

Helping to offset the initial cost of a solar hot-water installation are the rebate programs and tax credits offered by states and municipalities throughout the country. For a complete listing of federal and state-by-state tax and rebate incentives, visit the Database of State Incentives for Renewable Energy at

In addition, the new federal tax incentive program can offset your investment even more -- by as much as 30 percent, up to a maximum of $2,000 for a qualified solar hot-water system. An additional credit of equal value is available for a solar PV system.

The credit for a solar hot-water system is deducted directly from taxes owed and can be rolled over to the following year. For example, let's say your payroll deductions total $800 annually and you invest $5,000 in a solar hot-water system. Thirty percent of $5,000 is $1,500, so you'd receive a credit of $800 (your prepaid taxes) for the current year and be eligible for an additional tax credit of $700 the following year.

The best news, however, is that once your system is installed, you'll not only reduce your taxes but start cutting energy bills right away by as much as 30 percent. When it's all added up, it means that every dollar invested is actually worth an average of $1.30, says Tom Lane, president of ECS Solar Energy Systems, based in Gainesville, Fla. You can view his calculations at

To qualify for federal or state tax credits and/or rebates, the system might need to be certified for performance by the nonprofit Solar Rating & Certification Corp. or a comparable organization endorsed by your state government.

Given the cost, efficiency and environmental benefits, now is the right time for you to invest in a solar water-heating system.